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were planning on feeding out their calf production this year, due to low feeder prices. |
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Neal: That's great information. |
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Kevin: You put two and two together and surmise that feeders would actually be cheaper than they are had more feeders hit the market. I'm not sure how significant this is. Retained ownership in the feedlots has been picking up steam the last few years, and this is probably more piling on. |
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Kevin: I read the article regarding the contract hogs on Bridge News last week. It makes sense. They are taking the vertically integrated model from poultry and using it on hogs. You've got these huge, closely held operations now, like Premium Standard (owned by Continental), National Farms (Bass Brothers), and Seaboard. The first two are just producers, but Seaboard is completely vertical, with contract growers. Seaboard runs a big poultry operation in the Southeast and is doing the same thing with hogs in Oklahoma, Kansas, and Colorado. They will never disclose what they are actually paying for hogs from their company-owned and contract grower sources. |
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Kevin: I predict a new round of bankrupt producers and the resulting credit crunch in the AG sector, which will push prices lower yet. I hope I'm wrong. |
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The short answer is: Probably lower than you think. You asked about feeders and hogs. |
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Feeder cattle is always a subjective market and is influenced by factors that you would not normally think of. Feeders are part of the basic formula FC + Corn = LC. Also, if there is abundant pas- |
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